Global Insider: Mexico-Mercosur Auto Moves Send Mixed Signals

Under pressure from Brasilia, Mexico agreed last month to limit its automotive exports to Brazil, prompting Argentina to threaten to revoke its own trade agreement with Mexico in an effort to gain further concessions. In an email interview, Barbara Kotschwar, a research associate at the Peterson Institute for International Economics, discussed the Economic Complementation Agreement 55 (ACE 55), the 2002 automotive trade deal between Mexico and Mercosur, the trade bloc comprised of Argentina, Brazil, Paraguay and Uruguay.

WPR: What is the current state of trade between Mexico and Mercosur, particularly Brazil and Argentina, and what is the ACE 55 agreement meant to accomplish? ...